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Wednesday, June 03, 2009

Black Tables

One of my readers just sent me a note linking to a source that reports the IRS will be issuing (or has already issued) new withholding tables to pension plans. The revised withholding tables correct for the "Making Work Pay" credit for which retirees are not entitled, but which have been getting since April 1. I will provide a link in an update to this post since I have to run off now. It isn't at all clear when PERS will adopt these - June 1 - is the obvious date, but perhaps they won't do it until the COLA adjustment is made on the check to be received on August 1. When I update, I hope to have PERS' answer by then. In the meantime, this should help retirees plan more easily for the unanticipated and undeserved (at least according to the IRS and Congress) windfall. Update: the link to the article and a link to the IRS web site can be found here. Update #2: I just heard back from PERS. The "new tables" are not new withholding tables per se but include a supplemental withholding table that helps to get retirees back to near parity. PERS is studying the various options given by the IRS and will post an announcement once they have determined whether the cost of implementing the change versus the benefits gained are actually worthwhile. It is, by no means, a certainty that PERS will adopt these supplemental tables. Stay tuned for more information as it becomes available. In the meantime, you can adjust your withholding to offset the gains from the tax break if you want by filling out a new W-4P. And here you thought retirement would be a bowl of cherries.


5 comments:

MollyNCharlie said...

Thanks for the heads-up, Marc. This has turned in to a year when even I have no idea what I should be doing with my federal or my state withholding. There have been more changes to my tax status than the color changes a chameleon would make walking through a circus!

peg

MollyNCharlie said...

A call to PERS Member Information this afternoon (6/3 about 3 pm) got the information the PERS has "never" heard of this change and currently has no change in withholding planned. Clearly I got the same deposit amount for June that I got in May, no change.

The supervisor that took my call, when the employee couldn't help, said that any change would be posted to the "What's New" section of the PERS website *if* a change is in the works.

peg

Tim said...

If you google "irs tax for pensions" you will find many news articles that came out on May 14th talking about the new tables. I don't know why PERS haven't heard from the IRS by now. I am going to paste one link to a article for reading on the subject below.

http://dispatch.com/live/content/local_news/stories/2009/05/15/irs_change.ART_ART_05-15-09_A1_SSDSA7S.html?sid=101

Tim said...

If you google "Irs tax for pensions" There are many articles that were published on May 14th, 2009. I don't knnow why PERS hasn't heard from the irs by now.

Tim said...

If you google "irs tax pension" under the news of google, you will find many articles that were written on May 14, 2009 on the subject. I don't know why PERS has not heard from the IRS as of yet.